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Piramal flags ‘mistrust’

Climate of 'mistrust' between the government and the business community: Ajay Piramal

Our Special Correspondent Mumbai Published 28.09.19, 12:01 AM
Swami Vigyananda, convener of the World Hindu Economic Forum, UP Chief Minsiter Yogi Adityanath and Ajay PIramal, Chairman Piramal Group, during the inaugural session of the WHEF, in Mumbai, Friday, September 27, 2019.

Swami Vigyananda, convener of the World Hindu Economic Forum, UP Chief Minsiter Yogi Adityanath and Ajay PIramal, Chairman Piramal Group, during the inaugural session of the WHEF, in Mumbai, Friday, September 27, 2019. (PTI)

More and more industrialists are becoming disenchanted with the Modi government and have started to rail against its hostile and adversarial attitude towards the country’s business barons, who create wealth and generate jobs.

On Friday, industrialist Ajay Piramal came down hard on the Modi regime for the orchestrated raids, searches and lookout notices issued against corporate houses and business folk by various federal agencies — and said these actions had created a climate of “mistrust” between the government and the business community.


“Today, I see there is a gap, there is mistrust between the people who are in power and the people who are wealth creators,” Piramal said while addressing the World Hindu Economic Forum on the topic of “Boosting the economy of Bharat”. He said the wealth creators of the country should get the respect they deserve.

“Why do we need to have everything criminalised if there is a charge of an offence against you? With so much of information available, with so much of data available, do you need to have searches and raids? Do you need to issue lookout notices? It does not send out a positive feeling to any businessman,” Piramal said without naming any particular federal agency.

Industry has been rattled after Café Coffee Day founder V.G. Siddhartha committed suicide recently, leaving behind a note that accused the tax authorities of hounding him.

A few months ago, Jet Airways founder Naresh Goyal and his wife were yanked out of a plane while travelling to London and barred from leaving the country. Federal investigators have been looking into alleged financial irregularities at the airline, which suspended services in mid-April, but no formal charges have been made yet.

The government has been talking in a forked tongue on the subject.

In his Independence Day speech, Prime Minister Narendra Modi had said: “Wealth creation is a great national service. Let us never see wealth creators with suspicion. Only when wealth is created, wealth will be distributed. Wealth creation is absolutely essential. Those who create wealth are India’s wealth and we respect them.”

But there have been allegations that the government has unleashed the fury of its investigating agencies on businessmen who do not figure in its copybook of the crony capitalists that derive the fruits of its benefaction and profit from its regulations.

Finance minister Nirmala Sitharaman has also waffled on the subject of tax raids. After a period of relentless tax raids across the country, she tried to soothe concerns and held a series of meetings with tax authorities, advising them to observe a “bit of restraint” and not to “over-reach” while struggling to meet tax collection targets.

Piramal, who runs a $10-billion conglomerate that has interests in pharmaceuticals, financial services and real estate, has a personal net worth of $4.6 billion, according to Forbes magazine. He is a director on the board of Tata Sons and his son Anand is married to Mukesh Ambani’s daughter Isha.

Liquidity squeeze

The Piramal group chieftain also said the availability of capital had become a challenge for businesses — a view that appeared to conflict with the government and the Reserve Bank of India’s view that the liquidity crunch was over and the financial system was awash with funds.

Without mentioning the liquidity squeeze being faced by select entities, Piramal said the availability of capital was also a challenge facing the country.

Incidentally, Piramal had recently welcomed the Modi government’s decision to cut the base corporate tax to 22 per cent and claimed that the non-banking finance sector — which has been going through a period of acute stress in the past year — would save between Rs 250 crore and Rs 300 crore, which could be redeployed as loans.

Piramal’s withering comments on Friday echoed the words of a couple of other industrialists who had braved displeasure to speak out against the Modi government.

Adi Godrej had expressed deep concern in a recent speech at St Xavier’s College, Mumbai, warning that the rising intolerance and hate crimes in the country could seriously “damage the pace of growth of the economy and prevent us from realising our true potential”.

In early August, A.M. Naik, chairman of Larsen & Toubro, had asked the government to speed up decision-making and ensure faster project clearances.

Kiran Mazumdar-Shaw, chairperson and managing director of Biocon, had first hit out against the government after the Central Statistics Office released data showing that the economy had slowed to a six-year low of 5 per cent in the first quarter ended June 30.

“This is shocking; no one expected it to be so low,” Mazumdar-Shaw had said. “If this is not a wake-up call signalling an economic emergency, then what is?”

Recently, the Biocon founder was involved in a spat with Sitharaman on Twitter when she slammed the government for not doing enough to boost a sagging economy.

She had criticised the finance minister for personally announcing the ban on e-cigarettes — and wondered why Sitharaman was getting involved in things relating to the health ministry instead of focusing on her bailiwick: the economy.

The next day, the finance minister announced the corporate tax cut.

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